Bitcoin LTHs Realized Significant Losses Recently, Final Capitulation Here?

Keshav Verma

1 year ago

3 mins read

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Data shows Bitcoin long-term holders have realized a significant amount of losses recently, a sign that the final capitulation before the bottom may be here.

Bitcoin Long-Term Holder SOPR Shows Average of 27% Losses Being Realized This Week

According to the latest weekly report from Glassnode, BTC long-term holders seem to have harvested some losses this week.

The “spent output profit ratio” (or the SOPR in short) is an indicator that tells us whether Bitcoin investors are selling at a profit or a loss right now.

The metric works by looking at the on-chain history of each coin being sold to see what price it last moved at. If this price was less than the current one, then the coin has been sold at a profit.

On the other hand, the last selling price being more than the latest would imply the sale of the coin has realized a loss.

When Bitcoin SOPR values are greater than one, it means coins moving right now are, on average, selling at a profit.

While the value of the indicator being less than one suggests the overall market is selling at a loss at the moment. Naturally, the ratio being exactly equal to 1 signifies that investors are breaking even on average.

Now, here is a chart that shows the trend in the Bitcoin SOPR for long-term holders, a cohort that holds their coins for at least 155 days before selling.

Looks like the 7-day average value of the metric has sunk recently | Source: Glassnode's The Weekly Update - Week 22, 2022

As you can see in the above graph, the Bitcoin long-term holder SOPR has been observing a negative value during this past week.

The current value of the indicator suggests that each LTH coin spent in the last seven days has realized an average of 27% loss.

The report notes that in the history of the coin, similar values of the metric have only been observed during the final capitulation lows of bear markets.

This may suggest that the current Bitcoin market could also be nearing a bottom. However, both during 2015 and 2018, the LTH SOPR dipped even deeper and the price corrected further before the low was reached.

BTC Price

At the time of writing, Bitcoin’s price floats around $31.7k, up 9% in the last seven days. Over the past month, the crypto has lost 18% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of Bitcoin seems to have shot up over the past couple of days | Source: BTCUSD on TradingView

Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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